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Mass. Solar Factory Closing Shop, Heading to China

January 14, 2011Dustin Ensinger

America is set to lose a key cog in the clean energy machine this year as a Massachusetts solar panel factory moves production to China in order to take advantage of cheaper labor costs and government subsidies.

Evergreen Solar, located in Devon, Mass., plans to close its American facility and shift production to China, the company said. The closure will result in the loss of about 800 manufacturing jobs.

“Solar manufacturers in China have received considerable government and financial support and, together with their low manufacturing costs, have become price leaders within the industry,” the company said in a statement.

“While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint.”

Closing the facility will cost the company $355 million, and possibly even more if the state of Massachusetts has its way.

The state provided the company with tens of millions of dollars in the form of grants, practically free land and low-interest loans. Overall, the company received some $58 million in aid from the state under the condition that it would employ at least 350 workers.

One of the most lucrative offers was a land deal, which allowed the company to lease 23 acres at just $1-per-year. The cost would normally be about $2.3 million per year.

“We are disappointed to learn about Evergreen Solar’s decision to close its Devens facility,” Greg Bialecki, the state secretary for housing and economic development, told The Boston Globe. “The company has worked hard to compete against heavily subsidized foreign competition and to live up to its commitment to the Commonwealth. For our part, we must now ensure that impacted workers receive the resources they need to make successful transitions. And we will be actively working to recover any and all dollars owed to the Commonwealth through the clawback provisions of state grants, which require repayment if job commitments are not met.”

Despite the generosity of the state government, the company can save on costs by opening up a factory in China, where workers are paid a fraction of the cost of an American worker, and the state subsidies are much larger – and oftentimes illegal under international trade regulations.

In fact, U.S. officials have filed a complaint at the World Trade Organization, alleging that China’s illegal subsidies in the green energy sector are damaging the U.S. industry. The complaint says that China has pumped $216 billion worth of subsidies into the green energy sector, displacing countless American workers.

China currently produces about half of the world’s demand for equipment used in building solar panels and wind turbines. China and its companies, heavily subsidized by their government, invested more than $30 billion in 2009 to produce energy technology designed to lower carbon dioxide emission.

“The USW has raised issues covering a wide array of Chinese government policies affecting trade and investment in green technologies. This is a vitally important sector for the United States. Green technology will be an engine for the jobs of the future, and this Administration is committed to ensuring a level playing field for American workers, businesses and green technology entrepreneurs,” United States Trade Representative Ron Kirk in a statement.